I just want to ask why the subdivision will cost $15k? Do subdivisions usually cost that much?

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click Away

I agree. It is so frustrating that I cannot get a hold of relevant data for a decent price. It kills me and it is so frustrating.

Thanks for this post…whether anything will change…I don’t know. But it is good that people are making the problem aware.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click Away

I have found that I prefer to use franchise real estate agents (such as L.J.Hooker or Raine & Horne) instead of small local real estate agents. I have found that they are easier to work with and are better to work with. But obviously this is not always the case.
Real estate agents generally charge 7-8% of the rental income of a property. They also charge 110% of one weeks rent every time they need to lease the property out to a new tenant.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click Away

Don’t let anyone tell you not to do it if it fits into your investment strategy.
Be careful because there could be a lot of hidden costs. If it is in a park then you might have quarterly fees and you might actually not be legally allowed to rent it out to a long term tenant. But if you have looked at all these hidden costs and it still works out for you then it could be a viable option.

Financing will be hard. If you already own a property you could max out the equity on that property and then just use the cash to buy the property. Or you may be able to do some vendor finance on the property (it is worth making an offer for vendor finance). But yes, otherwise you may have trouble finding a lender. You might have to go with an untraditional lender and pay a higher interest rate.

Good luck with everything

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click Away

Why not make a low ball offer? Just explain why you have made the low ball offer. Tell the real estate agent that is sold for X only 2 years ago and due to the commercial zoning you don’t believe it is worth the current price. See what they come back with. The Vendor might counter offer.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click Away

I don’t know a lot about unit trusts, but I know a little about discretionary trusts. One thing you need to check with discretionary trusts is whether friends can create one together…someone told me it is only a family trust. But I don’t know if this is true.

Obviously you are creating your trust structure for asset protection and ease of finance. You probably don’t need to create 3 trusts to buy the property, only one. If you can create a discretionary trust with friends then you could start the trust, with all 3 of you as named beneficiaries, and all three of you as appointers (appointers have ultimate power is to who the trustee is), Then you could create a non trading company) in which you each are directors and each own one share to act as the trustee.

If someone hurts them self at the property they will sue the trust. If the trust has been negligent then insurance will not cover the claim so they will get whatever the trust owns. If the land in the trust does not completely cover the law suit they then move up to the trustee and sue the trustee. This is why you have the company as the trustee.

The directors of a company are only liable for the workings of that company if it is trading insolvently. If you have a non trading company this cannot happen. Thus the company is liqified, they get the $3 worth of shares and the law suit stops. Your other personal assets are not at stake.

Technically you only own a $1 share in a company, the trust owns the land. So if someone sues you personally then they get your share in the company. You can then (I think) create a new company and as the appointer, get rid of the first company as trustee and appoint your new company as trustee. So you never lose your property.

Don’t take all this as law though. I am not an accountant so see an accountant before doing anything.

Hopefully you can create a discretionary trust with friends. I don’t know much about unit trusts sorry.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click Away

This is great. Has the bank already valued the property? Because often lenders will not value the property above the purchase price as they want to limit their risk.
If you want to buy a second investment property then why not go the route of a 400k loan so you have have money in your offset account ready to go for the next investment? This will save you having to reapply for an equity loan.

Looks like you have put yourself in a good position for investing. The ability to get a 100% loan is extremely rare so you are one of the lucky few…well done.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click Away

Yeh those older style box units are UGLY!!! I doubt you could get away with building those things these days. As RHPlanning said, the council may ask you to dress them up to make them look better and not blight the surrounding area. If the demand is there for 1 bedroom units and you think that this will get you a better return on investment then look into it more. You may not be able to build 70's style units, but you can probably build some sort of units if the council permits you do. This is something I don't know a lot about but want to do in the future as it has the potential to create a killer cashflow and profit if you do it correctly. Keep us updated because I would love to see how this goes

The wall may be load bearing, in which case it will be expensive to remove as you will need to install struts in the roof to carry the load. Sonyasal is right, you will also need to deal with body corporate and get their permission to make strucutral changes. If it is not load bearing and it adds value to the apartment then I don’t see why you should have any problems, you just have to be aware of the expenses that it might incur. It is not as simple and doing it in a house.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click Away